Stock Thread (6 Viewers)

[Bob Sacamano]

I'm not suggesting any of that warrants any action RE: the stock. Just what the outcome will be when the new FASB rule takes effect.

 

[stbugs]

Mark my words, $MSTR gonna run up 30%+ next week.

Currently at $1,238.

What is happening next week that might drive up the price? ER??

Earnings, which I think they will 5x the estimates just based on the new accounting rules.

Also think we hit btc new all time highs by next friday with price discovery potentially getting wild.

This is the part that is confusing to me ...
so the company isn't doing anything to generate more revenue or profit, no new ideas or products, ... they are just changing how they report earnings so that it SHOWS more profit.
I don't see how this makes the company / stock more valuable but apparently it does.

The company is currently undervalued due to accounting rules. As I understand it...

Current State: You buy BTC at $70k. BTC value craters to $30k. You have to re-evaluate the carrying value of that crypto (annually, I believe), and if it is impaired, you recognize that loss as a reduction of pre-tax income (You just lost $40k * # of BTC you hold).

If that crypto then goes back up to $70k by the point your annual re-valuation takes place, it's obviously good for your company, but right now you can't recognize that increase in the value of your impaired BTC. They remain valued at $30k on your balance sheet.

Think about the volatility in crypto. For a company like MSTR, that means their balance sheet for the BTC they've held since '21-'22 reflects values significantly below current value.

Revised Rules: Effective in 2025, but apparently able to be implemented sooner, companies are allowed to switch to a Fair Value methodology. Companies like MSTR must revalue quarterly to recognize the Fair Value of their crypto. So those shares that have been on heir balance sheet at $30k will immediately snap back to $60k+ on their balance sheet going forward. They become a much more valuable company by accounting standards. And that increase in value will pass through to their bottom line as income.

It doesn't change the "real" value of the company. But lots of accounting requirements cause divergence between balance sheet value and liquidation value, and they can swing both ways.

I think I’d disagree on the undervalued part. That’s been a short seller argument that if you buy MSTR as a BTC vehicle you are paying way more than the current spot price of BTC. The market cap is $22B and the BTC holdings are $14B. Not sure how much debt they have because they have been buying more BTC by selling debt but as you can see buying a share would get you around 60% of the share price in BTC. Buy BTC via ETF and you get 100% of the share price you pay.

I think the accounting rule change is only there to hope that they can get into the S&P index, hoping that drives up the price, which again would mean you are getting less BTC per share.

A change in accounting rules and nothing else is going to boost the value of the assets they hold on their balance sheet. The value of those assets is understated relative to market value.

However you want to parse the words or however differently you want to state it, their balance sheet is valued below (but not undervalued?) what it will be when the accounting rule change is implemented.

I’m just saying undervalued in normal terms would not be correct. It’s a $22B company with no revenue growth and not significant operational earnings. The balance sheet and accounting method boils down to getting on the S&P index. People don’t care about the balance sheet. They care about the $14B in BTC, $22B market cap and possibly the company debt (to finance much of the BTC). The real balance sheet may improve but investors are already looking at their “BTC” balance sheet so to speak. That’s where if you liquidated the company for $22B, you’d only come back with $14B in BTC minus any debt payoff.

 

[stbugs]

I'm not suggesting any of that warrants any action RE: the stock. Just what the outcome will be when the new FASB rule takes effect.

Understood, that’s where I think it could be misread with “undervalued” as in the market cap being less than the cash on hand type situation.

 

[Desert_Power]

I’m far from a bitcoin bull but, if I were, I’d think there are more efficient ways of expressing that view than investing in a company/person with a history of fraudulent financial reporting

 

[SFBayDuck]

I’m far from a bitcoin bull but, if I were, I’d think there are more efficient ways of expressing that view than investing in a company/person with a history of fraudulent financial reporting

I treat my small position there as a leveraged play on BTC, so I expect huge volatility and understand the high risk.

 

[Peggy]

Yeah MSTR and BTC shouldn't be in the stock thread. Probably the crypto thread or even better the gambling thread

 

[NajehHejan]

I’m reading a lot of doom and gloom about the Japanese yen crashing, the Japanese holding a ton of US treasuries, possible liquidation of them would send bond prices soaring, which would crush our equity markets (among other things). Something about the Japanese damned if they do, damned if they don’t. Can someone explain this all to me like I’m 5?

 

[metoo]

I’m reading a lot of doom and gloom about the Japanese yen crashing, the Japanese holding a ton of US treasuries, possible liquidation of them would send bond prices soaring, which would crush our equity markets (among other things). Something about the Japanese damned if they do, damned if they don’t. Can someone explain this all to me like I’m 5?

You have bigger worries.

 

[KGB]

Well, well.

Looks like I'm not dead yet. Thx apple calls

 

[Sand]

For something completely different - bought some JAAA this morning. Had some bond monies available and decided to track something a bit different. 6.25% for AAA rated CLOs.

 

[General Malaise]

Rin Tin Tin!!!!!!!!! AWOOOOOOOOOOOOOOOOOOOOOOOOOO

 

[General Malaise]

Sounds like there could very well be an executive order banning Russian imports of HEU if congress doesn't pass it through....

 

[SFBayDuck]

A change in accounting rules and nothing else is going to boost the value of the assets they hold on their balance sheet. The value of those assets is understated relative to market value.

However you want to parse the words or however differently you want to state it, their balance sheet is valued below (but not undervalued?) what it will be when the accounting rule change is implemented.

I'm not suggesting any of that warrants any action RE: the stock. Just what the outcome will be when the new FASB rule takes effect.

Haven't seen anything in the earnings release news that they did anything here, MSTR down a bit AH.

Saylor has been selling 5,000 shares/day for a few months. Programmatic, on options that were set to expire, so of course he is. But obviously not a bullish signal. They bought $1.65B in BTC in Q1, which are currently under water ($65,232 average price).

BTC halvening behind us....ETF inflows have stalled, and in fact there are now outflows. What's the catalyst to push back up through the ATHs? My thesis has been focused around the ETFs driving demand (and price), which it did for a while. But price still couldn't push through overhead supply.

 

[FreeBaGeL]

A change in accounting rules and nothing else is going to boost the value of the assets they hold on their balance sheet. The value of those assets is understated relative to market value.

However you want to parse the words or however differently you want to state it, their balance sheet is valued below (but not undervalued?) what it will be when the accounting rule change is implemented.

I'm not suggesting any of that warrants any action RE: the stock. Just what the outcome will be when the new FASB rule takes effect.

Haven't seen anything in the earnings release news that they did anything here, MSTR down a bit AH.

Saylor has been selling 5,000 shares/day for a few months. Programmatic, on options that were set to expire, so of course he is. But obviously not a bullish signal. They bought $1.65B in BTC in Q1, which are currently under water ($65,232 average price).

BTC halvening behind us....ETF inflows have stalled, and in fact there are now outflows. What's the catalyst to push back up through the ATHs? My thesis has been focused around the ETFs driving demand (and price), which it did for a while. But price still couldn't push through overhead supply.

BTC price appreciation usually happens a few months after the halving, not actually at the halving. But it will be interesting to see what happens this time since there was such a big run-up before the halving this time, so it may already be priced in compared to past cycles at this same point.

https://charts.bitbo.io/halving-progress/

 

[Ridgeback]

Is anyone still delving into treasuries? I'm gonna put another chunk into either a 1 year or 2 year bond. 1 year is still yielding about 5.2% whereas the 2 year is about 4.95%. Decisions, decisions.

 

[Runkle]

Is anyone still delving into treasuries? I'm gonna put another chunk into either a 1 year or 2 year bond. 1 year is still yielding about 5.2% whereas the 2 year is about 4.95%. Decisions, decisions.

I'm seeing 5.1% on 10-month CDs, I don't have enough money to throw at bonds to make the extra .1% really worth it. Definitely keeping an eye on rates though and holding some cash in reserve for when the right moment comes.

 

[Ridgeback]

Is anyone still delving into treasuries? I'm gonna put another chunk into either a 1 year or 2 year bond. 1 year is still yielding about 5.2% whereas the 2 year is about 4.95%. Decisions, decisions.

I'm seeing 5.1% on 10-month CDs, I don't have enough money to throw at bonds to make the extra .1% really worth it. Definitely keeping an eye on rates though and holding some cash in reserve for when the right moment comes.

Yeah, I'm going the treasury route as there are no state or local taxes on any gains.

 

[Capella]

Amazon report day

 

[McBokonon]

Amazon report day

Wondering if they’ll complete the Megacap run on announcing a dividend.

 

[Bob Sacamano]

Can PYPL actually remain green after an earnings report?

 

[Capella]

Amazon report day

Wondering if they’ll complete the Megacap run on announcing a dividend.

Would be interesting. They’re always way behind on those things though.

 

[Bossman]

Amazon report day

Wondering if they’ll complete the Megacap run on announcing a dividend.

A dividend would make sense. So much profit generated by this company ... what else are they going to do with it?
It feels like even with a good er from AMZN, the price isn't going up much. It's become expected.

 

[kevzilla]

It sounds like somebody at AMZN is shooting that story down on background. Faber was pooh-poohing the whole idea earlier.

 

[kevzilla]

Re: Treasuries. The old man has the proceeds from a house burning a hole in his pocket. There was a guy from BofA saying the 10-yr would get to 5% by Memorial Day. That sounds pretty good to an 87-year-old. I told him I don't think we'll get there, but it might be time to go CD shopping again in May.

 

[McBokonon]

I just keep rotating some cash into 3 month treasuries via a ladder. I don't want to get stuck in anything for too long in case I want to invest it in equities if we get rate cuts, or if rates go higher because the exact opposite happens. 3 month rates are close to 5.4% right now. Of course if I was 87 or 60 or 25 I'd be doing something else.

ETA: correcting a little, I am doing 3 month, 6 month, 9 month, 1 year 4 rung ladders.

 

[Bob Sacamano]

Re: Treasuries. The old man has the proceeds from a house burning a hole in his pocket. There was a guy from BofA saying the 10-yr would get to 5% by Memorial Day. That sounds pretty good to an 87-year-old. I told him I don't think we'll get there, but it might be time to go CD shopping again in May.

Is the 1/3% game-breaking at this point in life? I feel like 4.667% tax free for a decade at 87 >>>>>> 5.5% for 12 mos taxed

 

[kevzilla]

Re: Treasuries. The old man has the proceeds from a house burning a hole in his pocket. There was a guy from BofA saying the 10-yr would get to 5% by Memorial Day. That sounds pretty good to an 87-year-old. I told him I don't think we'll get there, but it might be time to go CD shopping again in May.

Is the 1/3% game-breaking at this point in life? I feel like 4.667% tax free for a decade at 87 >>>>>> 5.5% for 12 mos taxed

There was some other hassle with Treasuries that I don't recall. Anything he wants to do, the website suggests he come down to the office anyway. His hearing is so poor that I need to be there, too. Then the Fidelity guy inevitably has to call New York to get anything executed. He gets great rates on non-callable CDs of any duration, and frankly, the thought of setting up another account gives him dyspepsia.

 

[FreeBaGeL]

I just keep rotating some cash into 3 month treasuries via a ladder. I don't want to get stuck in anything for too long in case I want to invest it in equities if we get rate cuts, or if rates go higher because the exact opposite happens. 3 month rates are close to 5.4% right now. Of course if I was 87 or 60 or 25 I'd be doing something else.

ETA: correcting a little, I am doing 3 month, 6 month, 9 month, 1 year 4 rung ladders.

Just curious because I don't really dabble with treasuries much, but what's the advantage to buying 3-month treasuries over putting the money into a completely liquid HYSA if having liquidity for equities is a factor?

The equity market moves pretty violently around rate policy these days. If we get dovish news around rate cuts the market will have already moved a ton by the time a 3 month treasury expires and a huge part of the move would be missed by the time that money becomes liquid again, right?

 

[McBokonon]

I just keep rotating some cash into 3 month treasuries via a ladder. I don't want to get stuck in anything for too long in case I want to invest it in equities if we get rate cuts, or if rates go higher because the exact opposite happens. 3 month rates are close to 5.4% right now. Of course if I was 87 or 60 or 25 I'd be doing something else.

ETA: correcting a little, I am doing 3 month, 6 month, 9 month, 1 year 4 rung ladders.

Just curious because I don't really dabble with treasuries much, but what's the advantage to buying 3-month treasuries over putting the money into a completely liquid HYSA if having liquidity for equities is a factor?

The equity market moves pretty violently around rate policy these days. If we get dovish news around rate cuts the market will have already moved a ton by the time a 3 month treasury expires and a huge part of the move would be missed by the time that money becomes liquid again, right?

Taxes, mostly.

These funds aren't for jumping in on swings driven by events. If the rate environment fundamentally changes, then I would start moving in gradually. And you can sell treasuries on the secondary market in a brokerage (which is where I buy them, not Treasury Direct) if I absolutely needed to act immediately.

 

[McBokonon]

@stbugs - anything to worry about with KNSL or is this a buying opportunity?

 

[stbugs]

@stbugs - anything to worry about with KNSL or is this a buying opportunity?

Seems like a buying opportunity. They didn’t announce anything bad. This happened back in October at earnings too and then it ran up. It’s a pretty thinly trade stock though so when it falls or goes up, it’s bumpy. It’s a decent holding for me so I’m not adding any unless it drops more. It’s still way up so I’m holding for a while.

 

[stbugs]

@stbugs - anything to worry about with KNSL or is this a buying opportunity?

Seems like a buying opportunity. They didn’t announce anything bad. This happened back in October at earnings too and then it ran up. It’s a pretty thinly trade stock though so when it falls or goes up, it’s bumpy. It’s a decent holding for me so I’m not adding any unless it drops more. It’s still way up so I’m holding for a while.

Also, it seems to be defensive in that it often goes up when the tech leaders aren’t doing as well and goes down when they are. Overall, been on a nice run since 2020 in terms of revenue and earnings. Might not keep growing as fast but it’s P/E ratio is less than companies like Walmart who is growing far less.

 

[JB Breakfast Club]

CLSK back on the table as a crypto play? Opened a small position a few days ago (just lucky timing) and already considering where to take profits. I remember the 2021 run that was touted in here...

Now +30% in a week. Still holding...

Sold CLSK as it slid the past few days. Quick 25% gainer with a pin to check back on this stock occasionally.

 

[Capella]

After-hours turned that frown right upside down

 

[cosjobs]

Is anyone still delving into treasuries? I'm gonna put another chunk into either a 1 year or 2 year bond. 1 year is still yielding about 5.2% whereas the 2 year is about 4.95%. Decisions, decisions.

I still have a decent position in the inflation based t bonds. Lately its been one or two percent below the fixed rate. But when inflation spikes... I feel like I have some protection.

 

[McBokonon]

went so low they did a 1-100 reverse split, which I honestly didn’t know was possible.

is that true? That’s hilarious.

Yeah, so technically I sold it in the hundreds. I remember someone posted in here about how it jumped up a ton and I went to the stock and was like WTF, why did I sell and then I looked at the 1 year chart and saw the old prices. Found a reverse split article and felt better about selling way back when.

Our moon biotech picks in here have been less than stellar in the end. I guess that makes sense as I’d think most moonshots do fail. Still wonder what that Whyatt guy did with HGEN. He said he bought a ton (seemed true based on his cost basis lowering numbers) and then disappeared when it tanked. That and CYDY are the only ones that seemed to attract a good chunk of interest in here.

TMDX has done very well. But they already had an FDA approved product when it first came up here.

$TMDX

$TMDX again!

 

[cosjobs]

Anyone else in Glasshouse (GLASF)? Its been a monster for aover a year now. I have cashed out profits a couple times, get back in on a dip and watch it rally and rally and rally.

 

[Capella]

After-hours turned that frown right upside down

why am I like this

 

[Bob Sacamano]

Anyone else in Glasshouse (GLASF)? Its been a monster for aover a year now. I have cashed out profits a couple times, get back in on a dip and watch it rally and rally and rally.

Sorry. I'm a stone thrower.

 

[Bob Sacamano]

Anyone else in Glasshouse (GLASF)? Its been a monster for aover a year now. I have cashed out profits a couple times, get back in on a dip and watch it rally and rally and rally.

Sorry. I'm a stone thrower.

This is a weed company?

 

[McBokonon]

$SBUX is on my watchlist for Stock People Keep Calling Blue Chips That Are Actually Structurally Terrible, Possibly Forever

Previous inductees:
$INTC
$BA
$T
$VZ
$PFE

 

[Bob Sacamano]

$SBUX is on my watchlist for Stock People Keep Calling Blue Chips That Are Actually Structurally Terrible, Possibly Forever

Previous inductees:
$INTC
$BA
$T
$VZ
$PFE

Actually want to take the time to dig into BROS at some point.

 

[General Malaise]

$SBUX is on my watchlist for Stock People Keep Calling Blue Chips That Are Actually Structurally Terrible, Possibly Forever

Previous inductees:
$INTC
$BA
$T
$VZ
$PFE

Actually want to take the time to dig into BROS at some point.

I sold all of mine at a huge loss. Never again.

 

[Ridgeback]

$SBUX is on my watchlist for Stock People Keep Calling Blue Chips That Are Actually Structurally Terrible, Possibly Forever

Previous inductees:
$INTC
$BA
$T
$VZ
$PFE

Actually want to take the time to dig into BROS at some point.

I sold all of mine at a huge loss. Never again.

You must have finally tasted their coffee.

 

[Capella]

That has to be the least eventful Amazon earnings I’ve ever seen.

 

[FreeBaGeL]

$SBUX is on my watchlist for Stock People Keep Calling Blue Chips That Are Actually Structurally Terrible, Possibly Forever

Previous inductees:
$INTC
$BA
$T
$VZ
$PFE

Actually want to take the time to dig into BROS at some point.

I sold all of mine at a huge loss. Never again.

You must have finally tasted their coffee.

I tried to do some market research. Drove up there and tried to order some coffee. The barista looked at me like I was speaking German. Do you want a triple pumpkin frappamochiato or a shamrock whipped latte dragonfruit masado, sir?

 

[kevzilla]

$SBUX is on my watchlist for Stock People Keep Calling Blue Chips That Are Actually Structurally Terrible, Possibly Forever

Previous inductees:
$INTC
$BA
$T
$VZ
$PFE

The old man wants to buy a slug of PFE. I'm sure I missed something, why is this a no-fly zone?

 

[McBokonon]

$SBUX is on my watchlist for Stock People Keep Calling Blue Chips That Are Actually Structurally Terrible, Possibly Forever

Previous inductees:
$INTC
$BA
$T
$VZ
$PFE

The old man wants to buy a slug of PFE. I'm sure I missed something, why is this a no-fly zone?

Because it’s dead money with no catalysts. Down 33% in five years and that’s with both a vaccine and a treatment for a generational pandemic. If you like yield while watching your principle wither away, it might be for you! But if the old man is looking for income, there’s a ton of better options.

 

[culdeus]

The Vix sure doesn't move like it used to on days like this.

 

[Bob Sacamano]

$SBUX is on my watchlist for Stock People Keep Calling Blue Chips That Are Actually Structurally Terrible, Possibly Forever

Previous inductees:
$INTC
$BA
$T
$VZ
$PFE

Actually want to take the time to dig into BROS at some point.

I sold all of mine at a huge loss. Never again.

You must have finally tasted their coffee.

Yeah, but the kids love their sugary energy crap. It's become the hangout spot here. Which intrigues me more than anything else